BET founder might not have role in city hotel

Some council members raising new questions

August 26, 2005|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Billionaire Robert L. Johnson, initially touted as the lead player in Baltimore's convention center hotel but consigned to a lesser role when the city decided to develop the hotel itself, could end up with no role at all.

And Johnson's company, RLJ Development LLC of Bethesda, and partner Quadrangle Development Corp. might not be paid for $700,000 worth of preliminary work if it isn't retained in some capacity, city development officials now say. The $700,000 is a portion of the $1.8 million fee the developers are requesting to oversee construction of the $305 million publicly financed hotel.

More than a year after Mayor Martin O'Malley and development officials endorsed the Johnson team, pinning their hopes for the city's future convention business on plans for a first-class Hilton hotel, Baltimore Development Corp. officials insist that Johnson, the co-founder of Black Entertainment Television, has never had a guaranteed role and knew that from the beginning. Several City Council members, however, say they are surprised that Johnson is not assured an ongoing role.

The BDC continues to recommend RLJ and Quadrangle for the role of owner's representative, otherwise known as construction monitor, and are negotiating the fee, said M.J. "Jay" Brodie, BDC president. But he said that decision is up to a nonprofit hotel corporation that has yet to be formed. The hotel corporation could negotiate a contract with the RLJ team or bring in someone else, Brodie said.

"We need someone to be the construction monitor," to ensure the hotel is built according to plans approved by the city and to Hilton standards, Brodie said. "Johnson and [Quadrangle] may or may not have a role."

As to the likelihood of Johnson's continued involvement, Brodie said, "We don't know, and can't guess. The board would vote. The corporation executes those contracts."

With the City Council poised to cast final votes on the hotel in less than a month, after initially approving it by a 9-6 vote, a lack of certainty is raising new questions among council members.

"Never has it been indicated that Mr. Johnson was a maybe," said Councilwoman Mary Pat Clarke, who voted against the hotel. "We don't really know how much it will cost, who will manage the assets, who will oversee the construction and whether it will attract conventions. This is an idea. It's not the kind of detailed proposal that we would require of a private developer."

Councilman Robert Curran, who supports the hotel, disputes the notion that the hotel corporation could remove members of a development team selected through competitive bidding.

"Obviously, the Johnson firm was the one" chosen after the BDC's request for proposals, Curran said. "They're the ones that will be managing the construction. I thought it was already etched in stone."

Johnson, who originally envisioned owning the Hilton, has declined to comment in the past two weeks on any aspect of his involvement in the project. In a Sun interview last month, Johnson said, "We were awarded the rights to negotiate with BDC. We're ready to move when the council authorizes the structure."

Johnson had the backing of the mayor even before the BDC requested bids from developers. A year before the BDC selected Johnson in late 2003, the hotel investor appeared next to O'Malley at a news conference to unveil Johnson's proposal.

Yesterday, a spokeswoman for the mayor said O'Malley would not comment on the Johnson/Quadrangle group's role.

Despite the presentation of Johnson's group as a partner in the project, it was only given the right to negotiate a deal with the city. The decision on whether to enter into an agreement will be up to the new hotel corporation, assuming that the City Council gives formal approval to the project, Brodie said.

The $699,000 RLJ has spent for preconstruction work includes helping to establish project goals, requirements and schedules, evaluating plans from architect RTKL (part of the team initially selected by the BDC) and assisting the BDC and RTKL in selecting contractors, such as interior designers and civil and mechanical engineers, said Irene E. Van Sant, project analysis director for the BDC.

"We have no agreement to pay them anything if they are not selected to move forward," Van Sant said.

The RLJ/Quadrangle joint venture is also helping to evaluate proposals from three design builders who are competing to construct the hotel. One proposal under consideration came from Baltimore-based Whiting-Turner Contracting Co., a former member of the Johnson-led hotel development team. Whiting-Turner failed to meet the construction budget, prompting BDC officials to ask in March for a new round of bids for the construction.